INSIGHT

Preparing for business rates revaluations

20-Nov-2014 - Last updated on 20-Nov-2014 at 16:44 GMT

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Nicola Murrish: 'The 2014 summer season will be very influential in the 2017 revaluation'

Last week, the Government announced that business rates assessments from 2017 onwards will be based on a property’s rental value on 1 April 2015. Nicola Murrish, associate at Vickery Holman, south-west commercial property consultants, provides the details

The announcement made by the Government regarding the rateable value (RV) will see all commercial premises revalued in line with their rental values as of the 1 April 2015.

If you are agreeing a new rent with your landlord under a rent review, lease renewal or you are extending, acquiring or disposing of accommodation, this will affect your new RV and we urge you seek professional guidance.

For premises where the RV is assessed having regard to trading receipts, such as pubs, the valuation office (VO) will be considering three years’ accounts leading up to 1 April 2015, so the 2014 summer season will be very influential in the 2017 revaluation.

Preparation

There is already a great deal of preparation from the VO in the build up to April 2015 and April 2017. They have already started issuing ‘forms of return’, which request confirmation of lease terms and rents paid, or trading accounts for those properties valued on this basis and you may have already received one. The responses to the VO’s ‘forms of return’ need to be carefully considered.

Prior to the new rating list going live on 1 April 2017, we are expecting the VO to issue a draft list in autumn 2016, which will at least give some prior warning to ratepayers and will enable them and their advisers to flag any immediate errors before April 2017.

Transitional relief

March 2015 will also see the end of the ‘transitional relief’ arrangements under the 2010 list, which phased in the increases as it changed from the 2005 to the 2010 list. Originally, this scheme would have phased RV liabilities up to the original end of the 2010 list, but with the postponement to 2017, we will now see some businesses bearing the full cost of their 2010 RV for two years before the revaluation.

If you have still been receiving transitional relief in 2014-2015 and are concerned about the impact on your rates liability, please seek professional advice.